Written by Staff Writer
01 Jul, 2021 | 12:41 pm
COLOMBO (News 1st); Sri Lanka’s Securities and Exchange Commission said it is probing unusual price movement of shares of LOLC Development Finance or NIFL and has already called for information from the CSE.
“The SEC has also observed the unusual price movement of this share and has already called for information from the CSE. The SEC too is evaluating the manner in which transactions have taken place. We are analyzing the trading patterns and behavior of investors,”the SEC said in a statement.
“We have also observed in some social media platforms that this share has been promoted. Therefore, we are presently trying to find out as to who has been involved in this process,” it added.
The Securities and Exchange Commission said if it finds any market malpractice, stern action will be taken against those who have been involved.
The Colombo Stock Exchange (CSE) turned negative on Wednesday (30) in an apparent reflection of investor concerns over the country’s foreign reserves and debt servicing as well as behavior of one illiquid stock, which is LOLC Development Finance (NIFL), market analysis said, reported the Island.
The stock price of LOLC Development Finance PLC, a listed company at the Colombo Stock Exchange, has been receiving widespread attention in the market over the past few days due to the unusual rise in its share price.
On Wednesday (30) its share price started trading at Rs 618.75 and at the end of the day it shot up to Rs 694.75.
In comparison to its end-May price of Rs. 73, Wednesday’s closing saw a scarcely credible total gain of 747% in a little under a month.
However, overall indices of the CSE had dropped in comparison to previous days.
Hence, the SEC has launched a probe into the matter taking into account the relevant factor.
Pursuant to an inquiry made by the CSE on the 28th of June, the Chairman of LOLC Development Finance PLC had noted that no undisclosed price sensitive information had been withheld by the company.
LOLC Development Finance has added, it presumed the company’s year end performance and the performance of its parent company LOLC group may have led to the abnormal surge in share prices.
Another discourse has arisen over the quantity of shares publicly listed by LOLC Development Finance.
When perusing reports of the CSE, 99.89 percent of the total shares of LOLC Development Finance is owned by the LOLC Group.
While 55.55 percent is held by LOLC Holdings, 44.34 percent is held by Commerical Leasing and Finance owned by the LOLC Group.
Hence, the publicly listed quantity of shares of LOLC Development Finance PLC at the CSE is 0.01 percent.
Is it possible to maintain a listed company by opening such a small number of shares to the public in accordance with the rules and regulations of the Securities and Exchange Commission?
Shouldn’t at least 20 percent of the shares be opened to the public?
However, an investigation has now been launched into the matter.
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